Key financial results for the fourth quarter 2017 included:
Total net sales of $820.7 million increased 8.3% from the prior year and included a positive 1.3% foreign currency translation impact. The result was a positive organic sales growth rate of 6.9%.
Income from operations was $78.3 million or 9.5% of net sales, up 30 basis points from prior year. Adjusted income from operations was $79.5 million or 9.7% of net sales, up 20 basis points from prior year.
The Company repatriated $90.0 million of cash and paid down $74.3 million of debt.
Fourth quarter 2017 segment results versus the prior year fourth quarter included:
Commercial and Industrial Systems Segment net sales were $407.7 million, an increase of 10.4%. Foreign currency had a positive 1.7% translation impact. The result was a positive organic sales growth rate of 8.7% driven by broad based global end market strength in both the OEM and distribution channels. Operating margin was 5.9%. Excluding $1.1 million in restructuring and related costs and a $0.4 million gain on sale of assets, adjusted operating margin was 6.1%.
Climate Solutions Segment net sales were $216.4 million, an increase of 0.6%. Foreign currency had a positive 0.7% translation impact. The result was an organic sales growth rate that was essentially flat at negative 0.1%. North American residential HVAC sales were unchanged from a strong prior year. Operating margin was 14.0%. Excluding restructuring and related costs of $0.5 million, adjusted operating margin was 14.3%.
Power Transmission Solutions Segment net sales were $196.6 million, an increase of 13.2%. Foreign currency had a positive 1.3% translation impact. The result was a positive organic sales growth rate of 11.9% driven by increased demand in the oil & gas and renewable energy end markets as well as in the distribution channel. Operating margin was 12.2%. There were no adjustments to the segment operating margin in the quarter.
The Companys fourth quarter 2017 results included the provisional impact of the U.S. tax reform legislation, which resulted in a $1.0 million decrease in the Provision for Income Taxes. This impact was a $0.02 benefit to GAAP diluted earnings per share but was excluded from adjusted diluted earnings per share.
*This earnings release includes non-GAAP financial measures. Descriptions of why we believe these non-GAAP measures are useful and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included with this earnings release.
"In the fourth quarter, our organic sales growth was a strong 6.9% versus the prior year," said Regal Chairman and CEO Mark Gliebe. "We ended the quarter with a 20 basis point improvement in adjusted operating margin over the prior year. We offset most of the commodity inflation impact with increased volume, incremental price and continued execution of our simplification initiative.
"Reflecting on the year, we made meaningful progress on our four key Enterprise Strategy metrics: organic sales growth, adjusted operating margin, return on invested capital, and free cash flow to net income."
Regal Beloit Corporation - Regal Beloit Corporation Announces Fourth Quarter 2017 Financial Results
